Shoe Stores

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 4,300 shoe stores in the US sell most types of new footwear and related items. Major product categories include women’s footwear, men’s athletic footwear, women’s athletic footwear, and children’s athletic footwear. Shoe stores may also sell clothing and accessories, such as socks, belts, hosiery, and jewelry. The shoe store industry includes national chains, regional chains, franchises, and independent operators.

Managing Highly Seasonal Demand

The shoe business is highly seasonal and driven by the fashion calendar, which generally revolves around fall and spring collections.

Dependence On Foreign Sources

Imports account for about 98% of footwear sold in the US according to the American Apparel and Footwear Association (AAFA).

Industry size & Structure

The average shoe store employs fewer than 10 workers and generates $9 million annually.

    • The shoe store industry consists of 4,300 companies that employ about 170,700 workers and generate $40.5 billion annually.
    • The industry is concentrated; the top 50 companies account for 82% of industry revenue.
    • The shoe store industry includes national chains, regional chains, franchises, and independent operators.
    • Independent shoe retailers average two to four stores, employ seven workers per store, and carry an inventory worth $250,000 or more, according to National Shoe Retailers Association (NSRA) survey. The average per-pair price is $88.
    • Large companies include Footlocker, Genesco (Journeys, Johnston & Murphy), Caleres (formerly Brown Shoe and parent of Famous Footwear) and DSW (Designer Shoe Warehouse). Large firms may have stores outside of the US or operate the shoe department within another retailer.
                                Industry Forecast
                                Shoe Stores Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Mar 4, 2024 - Higher Labor Costs, Lower Employment Levels
                                • According to data from the Bureau of Labor Statistics (BLS), employment levels for shoe stores decreased by nearly 3% in December 2023 from the previous year, and they are now 15% lower than before the pandemic. At the same time, employment costs have climbed significantly due to a tight labor market, with wages increasing by 10.2% in December 2023 from the previous year and by 50% since December 2019, according to the BLS. Producer prices for shoe stores trended down in the fourth quarter of 2023. Although producer prices dropped 5% in December 2023 from the previous year, they are still almost 9% higher than in 2019. Meanwhile, consumer spending levels grew in the last half of 2023, a 3.1% increase in the third quarter and 2.8% in the fourth quarter, according to Reuters.
                                • Consumer confidence levels fell in February 2024 after increasing for three consecutive months, according to data from The Conference Board. The Conference Board’s consumer confidence index fell to 106.7 in February 2024 from 110.9 in January 2024. According to Dana Peterson, Chief Economist at The Conference Board, “The decline in consumer confidence in February interrupted a three-month rise, reflecting persistent uncertainty about the US economy. The drop in confidence was broad-based, affecting all income groups except households earning less than $15,000 and those earning more than $125,000.” Peterson added that the decline in consumer confidence was largest in householders over 55 and those under 35. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
                                • More consumers would prefer free shipping over same-day delivery, according to a new Forrester report shared by Retail Dive. About 75% of US online consumers say that free shipping is among the most critical criteria they consider when deciding where to shop online, while only 20% selected next-day or same-day delivery as a key factor. Retailers such as Amazon, Target, and Walmart have invested in same-day and next-day delivery capabilities as a competitive differentiator to speed up delivery times for consumers. Nearly 50% of consumers surveyed by Forrester said the option for same-day delivery has little impact on which retailer or brand they will buy. The average delivery time cited in the article between placing and receiving an order was four days as of April 2023. Consumers have expressed interest in buying online and picking up at a nearby store (22%), curbside pickup (27%), and drive-through pickup options (15%).
                                • A new report from the National Retail Federation and Appriss Retail shows returns for the retail industry reached $743 billion in merchandise in 2023, according to Chain Store Age. The rate in 2023 was 14.5%, lower than the 16.5% in 2022 and 16.6% in 2021. The average retailer faces $145 million in merchandise returns for every $1 billion in sales. Online sales have a higher return rate; 17.6% of merchandise purchased online is returned compared to 10% for pure brick-and-mortar returns. Over 15% of holiday gifts are expected to be returned, totaling some $148 billion. Fraudulent returns account for 16.5% of total holiday returns. Types of return fraud in 2023 included returns of used, non-defective merchandise (49%), the return of shoplifted or stolen goods (44%), returns of goods purchased on fraudulent or stolen tender (37%), and return fraud from organized retail crime organizations (20%).
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